KAMPALA, Uganda — Uganda’s government has signed a $4 billion agreement with Alpha MBM Investments LLC, a UAE-based firm, to construct a 60,000-barrel-per-day oil refinery in Hoima District.
President Yoweri Museveni witnessed the signing of the implementation agreement on Saturday at the state house, praising the UAE firm’s commitment to investing in Uganda.
“I want to extend gratitude to His Highness Sheikh Mohammed Bin Maktoum and our allies from the UAE for their commitment to investing in Uganda,” Museveni said.
The refinery project, which has faced delays due to funding hurdles and changing investor interest, is part of Uganda’s broader strategy to maximize benefits from its crude oil reserves. The project aims to boost Uganda’s energy security by reducing reliance on imported petroleum products and serving neighboring countries.
The refinery will be located in Kabaale, Buseruka Sub-County, Hoima District, and will have a capacity of 60,000 barrels of oil per day. The project will also include the construction of a 211 km multi-product pipeline to a storage terminal in Namwabula, Mpigi District, as well as a storage terminal for refined products in Namwabula.
The estimated project cost is approximately $4 billion, which will be fully financed through equity. Energy Minister Ruth Nankabirwa stated that Uganda has chosen to fully finance the refinery through equity, with the project being developed by Uganda Refinery Holding Company (URHC), a subsidiary of Uganda National Oil Company (UNOC).
The refinery is expected to be constructed within three years and will process crude oil from Uganda’s Albertine Graben region. The facility will produce gasoline, diesel, and jet fuel, reducing Uganda’s reliance on imported refined fuel and stabilizing fuel prices.
The project has included land acquisition and a Resettlement Action Plan (RAP) for affected people. The refinery will be a Residue Fluid Catalytic Cracker (RFCC) type, with the first commercial output expected around 2028.
The signing of the implementation agreement marks a significant milestone in the project’s development. The agreement outlines the terms and conditions for the construction and operation of the refinery, including the roles and responsibilities of the parties involved.
President Museveni emphasized the importance of the project, stating that it will transform Uganda into a regional hub for petroleum refining and distribution. He also noted that the project will create jobs and stimulate economic growth in the region.
The refinery project is one of several oil and gas projects underway in Uganda. The country has discovered an estimated 6.5 billion barrels of crude oil in the Albertine Graben region, and is working to develop the resources to boost economic growth and energy security.
